Lucron: No inflation clauses in our projects

14. November 2022
Lucron: No inflation clauses in our projects

A new term has emerged in discussions about the prices of new housing in Slovakia – inflation clauses. This is a consequence of the unprecedented situation on the real estate market, which has been hit by rising prices of energy and building materials. At Lucron, we believe developers should not transfer their business risk to their clients. That is why we do not use inflation clauses and will seek to continue this policy. This is because we consider the strategic planning of construction projects and sales to be the right way to go.   

Rising costs, which are difficult to predict, especially in long-term projects, are inevitably reflected in the prices of apartments, and developers are responding to this situation in different ways. An inflation clause in a contract means that the developer can unilaterally increase the price of the apartment you are buying after you have signed the future purchase contract. They can do so on the grounds of inflation or increased input costs.

“This puts the client in an uncomfortable situation, as the mortgage approved by the bank may no longer be enough to buy the property. Clients who do not have enough savings, or whose bank refuses to increase their mortgage may be forced to withdraw from the contract and look for a new home,” explained Martina Slamková, head of customer financing at Lucron.

That is why it is important to buy your home from proven and experienced developers who do not transfer their business risk to their clients. Flat buyers can then be sure the price of the apartment is final and will not change after signing the contract.

At Lucron, we deal with increases in costs and material prices by phasing the sale of our apartments. We do not put all of them on the market at once, but in phases, and in each phase we offer only a certain number of apartments, which allows us to reflect further cost increases in the prices of the apartments. This means that if, for example, the price of materials rises disproportionately in a given period, we can reflect this accordingly in the price of the apartments we have not yet sold.

Thanks to Lucron’s strategic construction planning and years of experience, our clients do not have inflation clauses in their contracts, which is a great advantage at present. “This means that clients acquire their apartments at a fixed price, which will not increase due to inflation during construction,” said Martina Slamková.